The Card Factory today shows its online business is still larger than it was before the pandemic – but smaller than it was a year ago. At the same time, sales at its stores have fallen, both compared to last year and the year before.
The greetings cards and gifts retailer, a Top500 retailer in RXUK Top500 research, today said that sales of £337.3m in the 11 months to December 31 2021 were ahead of its expectations – but they were a fifth lower (-20.5%) than the same period in 2019, when sales came to £424.5m.
Lower sales came primarily as a result of store closures at the beginning of the year – stores were closed for about 20% of available trading days, with openings starting on April 12. Store sales of £310m were down by 0.8% on the same time in the previous year on a like-for-like (LFL) basis that strips out the effect of store closures and openings – and 5.4% down on the same period two years ago.
Online sales reached £22.2m in the period. That’s 12.1% down on the previous year, but 23.3% higher than two years earlier. Sales rose on the Card Factory’s website compared to last year (+1.1%) and the previous year (+130.3%), but fell at Getting Personal both compared to last year (-20.7%) and the year before (-11.4%) following a decision to focus on more profitable sales.
The retailer says it was able to manage supply chain disruption well in the run up to Christmas. But by the end of the period it still had £7m in deferred rent still to pay, having paid deferred rent of £14m and VAT of £19m during the period.
Looking ahead, Card Factory expects its costs – in staffing and IT investment – to rise but expects full year revenues to come in at more than £360m and pre-tax profits to be between £7m and £10m. That would mean sales ahead of the £285.1m it reported in the year to January 31 2021, but profits would decline from £16.4m last time.
Card Factory chief executive Darcy Willson-Rymer says: “ We continue to see improved trading performance across all channels, with transaction volumes in our stores outperforming high street footfall recovery, demonstrating the loyalty of our customers and strength of the brand. The customer response to our Christmas ranges was particularly strong, across both card and complementary product ranges.
“Our vertically integrated model has put the group in a strong position to partially mitigate the supply chain challenges and inflationary pressures that have been seen across the wider market to date. Whilst we expect to be able to offset inflationary pressures to an extent through price increases across our ranges, we do anticipate some margin pressure during the next financial year, as the forecasted inflationary headwinds continue. I remain hugely excited by the opportunities available to Card Factory as we focus on the implementation of our strategy and the transformation of the business to a full omni-channel retailer.”
